Credit Suisse reorganisation to split in investment banking
20 November 2012
Credit Suisse Group AG, the second-largest Swiss lender, is in the process of reorganising its operations as it aims to create two divisions, investment banking and wealth management.
The divisions would each be expected to produce half the profits of the group when markets normalised, according to the bank's chief executive officer Brady Dougan said in a statement.
The investment bank contributed about 39 per cent to the group's pre-tax profit in the first nine months of this year. The move would also accelerate and potentially increase the cost savings Credit Suisse was targeting, Dougan said.
Dougan reaffirmed Credit Suisse's commitment to a fully-fledged investment bank three weeks after UBS AG's announcement of 10,000 job cuts and shrinking of debt-trading businesses to focus on money management. UBS is the largest Swiss lender (See: UBS to slash 10,000 jobs worldwide in 3 years).
According to Dougan, Credit Suisse had already adapted the securities division to stricter regulation and would look to expand the debt unit as some rivals retrenched.
Credit Suisse also aims to trim a further 1 billion francs in annual costs by the end of 2015, adding to a 1 billion-franc savings programme announced in July and a 2 billion-franc expense reduction achieved since last year.
The new investment bank's structure ''reflects the importance of the equities and investment banking advisory and underwriting businesses and also recognises the progress we have made in evolving our fixed-income business to the new environment and the strength of this business for Credit Suisse,'' Dougan said in the statement. ''This streamlined structure will produce further synergies and help reduce expenses across the bank.''